Deadbeats: How to Handle Delinquent Accounts

Deadbeat dentists can be the biggest drain on your cash flow and one of the most frustrating aspects of running a laboratory. David Sher, co-author of How to Collect Debts and Still Keep Your Customers, estimates that 18% of customers are considered "slow" payers and 2% have no intention of ever paying. Although chasing these overdue payments can be time-consuming and even awkward, letting them "get away" compromises the money-making potential of your business.

Collection experts agree that the best way to avoid collection problems is to stop them before they start. Your first line of defense is to establish a clear policy that lets your dentist-clients know, in advance, how and when you expect them to pay. "Afraid they'll jinx the sale, many small business owners don't explain their terms up front. That's a big mistake. Your ability to collect often depends on clearly defining your payment terms during the initial sale," explains Sher.

Having...